DCB Bank Share Price Falls 6.5% After Q1 Results; Rise in Slippages and Provisions Impact Sentiment

Market Performance

DCB Bank share price dropped sharply by 6.5% on Thursday, July 31, following the announcement of its Q1 FY25 results during market hours. The stock was trading at ₹132.69, extending its monthly loss to 9%, although it still holds a 10% gain year-to-date.

Main News

The sharp decline in DCB Bank share price came as investors reacted to higher slippages and credit costs, despite growth in profits and core income.

A noticeable increase in fresh slippages, provisioning, and a decline in net interest margins affected investor sentiment.

Company Details

• Gross NPA stood at 2.98%, slightly lower than 2.99% in the March quarter.
• Net NPA increased marginally to 1.22%, compared to 1.12% in the previous quarter.
• Return on Assets (RoA), on an annualised basis, declined to 0.81% from 0.95% in March and 0.82% last year.

Revenue

• Net Interest Income (NII) for Q1 was ₹581 crore, marking a 17% YoY increase.

Other Income

• Other income saw a sharp rise to ₹236 crore, up from ₹143 crore in the same quarter last year.

Net Profit

• Net profit for the quarter stood at ₹157 crore, a 20% YoY rise, driven largely by growth in other income.

Provisions and Slippages

• Provisions surged to ₹115.1 crore, significantly higher than ₹67.2 crore in March and ₹28.39 crore in the same quarter last year.
• Fresh slippages rose sharply to ₹580 crore, from ₹365 crore in Q4 and ₹372 crore in Q1 of the previous year.

Net Interest Margins (NIMs)

• NIMs dropped by 19 basis points to 3.2%, compared to 3.39% in March.

Business Growth

• Advances rose by 21% YoY to ₹51,215 crore.
• Deposits grew 20% YoY to ₹62,039 crore, indicating a robust expansion in the bank’s lending and deposit base.

Summary of the Article

Despite a 20% increase in net profit and a strong YoY growth in both advances and deposits, DCB Bank share price witnessed a sharp 6.5% fall after the Q1 results. The decline was largely due to rising slippages, higher provisions, and narrowing margins.

With asset quality holding relatively steady, the spike in provisioning and slippages remained the key concern for investors, leading to a noticeable impact on the bank’s stock performance in the short term.